Explanatory Memorandum to COM(2012)362 - Association of the overseas countries and territories with the EU ("Overseas Association Decision") - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2012)362 - Association of the overseas countries and territories with the EU ("Overseas Association Decision"). |
|---|---|
| source | COM(2012)362  |
| date | 16-07-2012 |
1.1. General context
OCTs have been associated to the European Union since the entry into force in 1958 of the Treaty of Rome. They are islands located in the Atlantic, Antarctic, Arctic, Caribbean, Indian Ocean and Pacific regions. They are not sovereign countries but depend on four Member States of the EU: Denmark, France, the Netherlands and the United Kingdom. The association of the OCTs with the Union flows from the constitutional relations that these countries and territories have with the four Member States.
In general, OCTs have wide ranging autonomy, covering areas such as economic affairs, employment market, public health, home affairs and customs. Defence and foreign affairs usually remain within the remit of the Member States. The OCTs are not part of the Union's customs territory and are outside the Internal Market. The Union legislation therefore does not apply.
Being nationals of the EU Member States to which their countries and territories are constitutionally linked, OCT inhabitants hold EU citizenship. The OCTs' total population represents only 0.02% of the world population (1.2 million).Their total land mass represents only 80,000 sq km i.
Since the adoption in 2001 of the current Overseas Association Decision, the regional and international environments in which OCTs operate has considerably changed. New political priorities have emerged at European and international level, (such as environment, climate change, sustainable management of natural resources) as well as changes in global trade patterns. With the Europe 2020 Agenda, the European Commission proposed a strategy i articulated around three priorities: smart growth, sustainable growth and inclusive growth as a response to the economic and financial crisis.
For their part, the OCTs continue to face economic and social problems and/or struggle to found their economies on a sustainable basis. They are confronted with a number of difficulties linked to their fragile environments and the need to secure the environmental pillar of sustainable development.
The main challenge that OCTs face consists in putting their economies and societies on a sustainable development path by increasing their competitiveness, reducing their vulnerability, increasing environmental resilience, and cooperating with their neighbours and integrating in the regional and/or world economies, where this is possible. For the Union, the challenge resides in supporting the OCTs with the accomplishment of these goals and of the purpose of the association as defined in Article 198 of the Treaty on the functioning of the European Union, via a framework that is adapted to OCT needs, realities, particularities and diversity.
1.2. Existing provisions
The current rules and procedures of the EU-OCT association are laid down in Decision 2001/822/EC of the Council of 27 November 2001 on the association of the overseas countries and territories with the European Community, (OJ L 314/1, 30.11.2001), as amended by Decisions 2007/249/EC (OJ L 109/33, 26.04.2007) and XXXXXXX (Decision regarding Saint-Barthélemy).
1.3. Consistency with other EU policies
"Europe 2020" provides the benchmark against which the coherence of EU policies and the promotion of EU values, standards and interest need to be checked i. Coherence with the Europe 2020 strategy should be sought as far as its smart growth and sustainable priorities are concerned, promoting support to research, innovation as well as to information and communication technologies (ICT) and sustainable growth capacities as catalysts for socio-economic development.
The 2014-2020 OAD will play an important role in that respect. Indeed, the idea of establishing ‘centres of experience and expertise’ could relate to the implementation and promotion of high standards, including international standards, e.g. in the fields of environment and food safety and consumer health. The OCTs are all characterised by rich biodiversity. The sustainable use and protection of this biodiversity would benefit from better scientific documentation and access to research and innovation results. Likewise, the implementation of international standards within the area of food safety, animal and plant health could facilitate trade between OCTs and their trading partners, including EU Member States. The Union's commitment to environmental standards as well as its role as a global player in the fight against climate change could be of great value to both the Union and the OCTs. The Commission believes that biodiversity and other natural assets of the OCTs could be the object of a strengthened cooperation in the field of research, innovation and conservation. A partnership in the area of environment could be of mutual interest to both parties.
Contents
The revision of the Overseas Association Decision has been the subject of various stakeholders' consultations throughout the period 2008-2011. These include public consultations, but also regular ad hoc meetings between the OCTs, the Member States to which they are constitutionally linked and the European Commission, as well as dialogue in the context of the instances foreseen under Article 7 of the current Overseas Association Decision: annual fora , regular trilateral meetings and partnership working parties dedicated to environmental issues, trade issues, regional integration of the OCTs, financial services in the OCTs and the future EU-OCT relations.
Consultations
The outcome of stakeholders' consultation highlighted the following issues:
In their replies to the 2008 Green Paper i, stakeholders called for a change of the association's current focus on poverty reduction and development cooperation to a more reciprocal relationship focused on the sustainable development of the OCTs (i.e. a development model that conciliates economic activities and social well-being in the long run while preserving natural resources and ecosystems for future generations), which could, at the same time, support the promotion of EU values and standards in the wider world.
This was highlighted during the interventions at the stakeholders' conference in October 2008 which gathered over 100 interested parties from the OCTs' authorities, their Member States, the Union's institutions and bodies and civil society at large.
The Council of the European Union i also welcomed and expressed support to the change of paradigm.
In a Joint Position Paper i adopted in February 2011, the OCTs and their Member States called for a better recognition of the OCTs as part of the European family, an association further based on the mutual interests of the Union and the OCTs and a focus on potential and vulnerabilities of the OCTs. The document also calls the attention to the necessity to recognize and take the interests of the OCTs in the following areas: erosion of preferences and trade related issues, and building capacity.
It was also underlined that issues relating to environment, climate change and disaster risk reduction should constitute a priority for the future EU-OCT relations: sustainable use and protection of OCTs biodiversity and natural resources, environmental security, energy and renewable energy, ecosystems conservation, fight against climate change impacts and mitigation, preparedness and response to disasters, invasive species, sustainable fisheries. Stakeholders i called for an enhanced cooperation of the Union with the OCTs and outermost regions in the field of conservation of biodiversity and ecosystems services.
Solidarity between the Union and OCTs should be based on the fact that OCT inhabitants, as nationals of the related Member States, were also EU citizens. It was underlined that by helping OCTs to strengthen their competitiveness and resilience, reduce their vulnerability and implant themselves in their regional environment, the Union would actually be investing in strategic outposts able to promote Union’s values in the world.
2.2. Collection and use of expertise:
The EU-OCT association was analysed in various studies, commissioned either by the Commission or by the OCTs. These studies covered topics such as the trade regime contained in the OAD, the OCTs' environmental profiles, OCT statistical systems and capacities, OCT disaster preparedness as well as the cooperation of the Union with the OCTs during the period 1999-2009 i. The latter was presented and discussed with the stakeholders on the occasion of the annual OCT-EU Forum in March 2011.
The main recommendations of the different studies with regard to the Union’s financial assistance to OCTs were the following:
to incorporate the political priorities that emerged in the last decade in the programming of EU-OCT cooperation;
to adapt rules and procedures of the programming of financial assistance so as to reduce response time of assistance;
to promote cooperation between OCTs and their neighbouring countries, amongst others through a better coordination of the respective financial instruments available to OCTs, ACP States and the outermost regions;
to facilitate access to Union’s horizontal programmes for which OCTs are eligible.
The main recommendations of the different studies with regard to trade and trade related aspects of the Overseas Association Decision were the following:
to adapt the arrangements concerning trade in goods so as to take structural difficulties better into account, amongst others by introducing more flexible rules of origin for OCT goods exports to the Union;
to allow for the possibility for OCTs to engage in more favourable trade relations with other OCTs and developing countries, so as to reflect the increasing importance that trade in services has gained in world and regional economies in the last decade and to facilitate regional integration in this area;
to foresee support and capacity building for the development of OCT trade related policies as well as to assist OCTs in regulatory reform;
to support dissemination within OCTs of information regarding the conditions defining access to the EU market;
to maintain the direct dialogue between the European Commission and the OCTs on e.g. trade and trade related issues and ensure that OCT interests are taken into account in the context of EU trade negotiations.
With regard to environmental issues, the different studies recommended that the Union and the OCTs cooperate more in the following areas:
climate change,
natural disasters,
threats to wildlife and biodiversity, habitat destruction,
illegal, unregulated and unreported fishing,
waste management,
water supply and sanitation.
2.3. Impact assessment
In the impact assessment three policy options were examined in detail.
Policy option 1: Status Quo Renewal of the current Overseas Association Decision without any changes.
Under Policy option 1, the structure and the content of the currently into force Association Decision would be maintained for the period 2014-2020.
Maintaining the status quo could legitimately be considered as a valid option for the future EU-OCT association as current arrangements were found to have been beneficial for the OCTs' social and economic development, amongst others by providing free access to the large EU market and the possibility of support for exploiting the export opportunities this represents. The EU-OCT cooperation in the period 1999-2009 was considered by external studies to have been coherent with both the association's objectives and the OCTs' political priorities and concluded that no marked contradictions or inconsistencies had occurred between EU-OCT cooperation and other Union policies. Though consistent with Part Four of the TFEU and its Preamble, option 1 would not accomplish the shared ambition of OCTs, their Member States and the Commission to reshape and modernise the EU-OCT relations on a reciprocal basis. Rather than modernising the relations and introducing a more reciprocal partnership, in which mutual interests could be better taken into account, the donor/beneficiary rationale which has traditionally underpinned EU-OCT relations would be maintained.
OCT goods and services access to the Union would remain subject to the existing rules and would lead to loss of market access for the OCTs (due to preference erosion). This would have a negative impact on the social and economic position of OCTs.
Policy option 2: Modernisation of the Overseas Association Decision and alignment with EU policy framework
Option 2 would modernise and align the OAD with the Union policy framework. Its objectives and principles would be revised, taking into account the political orientations of the Council of the EU, the requests the OCTs and their Member States expressed on different occasions as well as the results of external studies.
Policy option 2 would enhance an EU-OCT cooperation based on the mutual interests the stakeholders identified throughout the consultation process. It would also promote a more efficient cooperation through a more focus and coordinated action between the Union, the OCTs and their Member States. Areas of cooperation recognized as priorities by the OCTs would receive an enhanced support from the Union (e.g.: conservation of biodiversity and ecosystem services, research and innovation).
Under policy option 2, the Union would support the OCTs to address sensitive issues undermining their sustainable development, such as climate change which they cannot tackle alone. For such challenges, insular territories cannot develop successful measures alone, they need to find partners and be integrated in global responses.
Policy option 2 would offer to the OCTs a modernised trade regime with the Union that would 1) entail improved rules and origins and 2) guarantee a treatment for trade in services and establishment that would not be less favourable than the one given by the Union to other third partners, which is not the case under the current framework.
Policy option 2 would be consistent with Part Four of the TFEU and its Preamble. It would also translate the political orientations of the Council of the EU on the three objectives of competitiveness, resilience and cooperation. Under policy option 2, the association framework would take into account recent policy developments and would take stock of discussions that emerged in the last decade. Policy coherence would be ensured under this option and would be strengthened. The social, economic and environmental impacts would be more positive than under options 1.
Policy option 2 would better reflect the notion of mutual interests than it is currently the case. It would allow the integration of Union policy agenda priorities in the relations between the Union and the OCTs and the EU added value as a global partner in emerging global issues would be enhanced. In doing so, the OCTs better promote Union's values and standards in the wider world.
Policy option 3: Several partnership agreements concluded
Option 3 would entail a diversification of EU-OCT relations. In the area of trade and economic cooperation two approaches would be adopted. Certain OCTs could be included in other EU bilateral trade arrangements, namely Economic Partnership agreements (EPAs) or FTAs, where relevant and possible. For the remaining OCTs, an OCT trade regime equivalent to policy option 1 or 2 would be foreseen under the association framework. Whilst this would not cover the trade and economic cooperation with those OCTs which would have been included in other trade agreements, it could cover cooperation with all OCTs in all other areas. An alternative option would consist in having all cooperation with OCTs that would fall under an EPA or FTA take place in the context of these agreements. This would include that financial assistance would also take place outside of the association framework.
By integrating or associating OCTs to other trade agreements, some of the objectives of the EU-OCT association could be met. However, this would be done outside of the association as such. Furthermore, option 3 may not be fully adapted to the needs and realities of most or even all OCTs. There may be negative impacts also for the Union itself if significant compensation is required in order to incorporate the OCTs into existing agreements. By integrating OCTs in other trade agreements the associated countries and territories with constitutional links to Member States would legally and effectively cease to be OCTs. As the implementation of policy option 3 may result in the Union having to work out solutions for setting up different types of relations with each of the OCTs, the legal process would be very complicated and would need to be reiterated for every OCT. It would likely increase confusion as regards to their status and that of their inhabitants. Certain rules currently contained or being considered in the different agreements may not apply to OCT inhabitants to the extent that they are EU citizens. Thus, the implementation of policy option 3 may amplify the tension that exists between the territorial and personal scope of the TFEU. The confusion might be further increased by the provision of different types of cooperation under different kinds of frameworks.
3.1. Legal basis
The EU-OCT association is based on Part Four of the Treaty on the Functioning of the European Union. The detailed rules and procedures of the OCT-EU association are laid down in Decisions of the Council on the basis of Article 203 of the Treaty on the Functioning of the European Union, which foresees that such acts are adopted through a special legislative procedure:
3.2. Subsidiarity
The detailed arrangements of the provisions in Part Four of the TFEU necessarily have to take place at Union level as the purpose of the association, the social and economic development and close economic ties between the OCTs and the Union as a whole, cannot be achieved via actions at Member State level. Moreover, with regard to the OCT trade regime, Member States' actions would not be possible as the common commercial policy falls within the domain of the Union's exclusive competence (Part Five, Title II of the TFEU).
The approach towards cooperation with the OCTs contained in the Commission's legislative proposal respects the principles of partnership, complementarity and subsidiarity. It proposes that the Union financial assistance to OCTs be based on programming documents, for which the competent OCT authorities and the Commission would be jointly responsible and which would define the cooperation strategies between the Union and the OCTs. These cooperation strategies would be based on the development objectives, strategies and priorities adopted by the competent OCT authorities. Activities would be decided upon in close consultation between the Commission, the OCTs and their Member States, in full respect of the respective institutional, legal and financial powers of each of the partners.
Without prejudice to the Commission's powers, the OCT authorities would have primary responsibility for implementing the operations agreed upon under the cooperation strategy. The Commission would be responsible for establishing the general rules and conditions regarding these programmes and projects.
3.3. Proportionality
The objectives of the association, as mentioned in Articles 198 and 199, call for a comprehensive partnership, which comprises an institutional framework and trade arrangements and covers many areas of cooperation as well as the basic principles governing Union financial assistance to OCTs. This calls for a wide ranging and far reaching legal instrument.
The objectives set out by the Treaty project themselves into the long term. This calls for a Decision of which the duration is sufficiently long. As during the 2014-2020 Multiannual Financial Framework OCTs will benefit from both the 11th European Development Fund and from the Union's general budget, an alignment of the duration of the Decision on that of the Multiannual Financial Framework is appropriate.
The Commission proposal puts forward an approach that is flexible and tailored to the situation of each OCT. It is proposed that the effectiveness of the EU-OCT cooperation be monitored through audits, ex ante, mid-term and ex post evaluations.
In the Commission Communication i on 'Preparation of the multiannual financial framework regarding the financing of Union cooperation for African, Caribbean and Pacific States and Overseas Countries and Territories for the 2014-2020 period (11th European Development Fund)', an amount of EUR 343.4 million is foreseen for cooperation with the OCTs.
The amount of EUR 343.4 million shall be allocated according to a Council Decision to be taken before 31 December 2013 for implementing the Association with the OCTs, of which EUR 338.4 million to finance territorial and regional programmes, and EUR 5 million in the form of an allocation to the EIB to finance interest subsidies and technical assistance in accordance with the Overseas Association Decision.